Wisconsin Issues Guidance on Taxability of Educational Products, Goods and Services

The Wisconsin Department of Revenue has issued guidance on the sales tax treatment of educational items including live in-person educational services, live digital online educational services, tangible books and videos, and digital books and videos.

Sales of live in-person educational services and live digital online educational services are exempt. When a person provides live in-person educational seminars or classes at a college or technical school or provides live educational webinars online, the charge for the educational services is exempt, including the service provider’s charge for mandatory educational materials. Note that the service provider must pay tax on its purchases of mandatory educational materials that it provides incidentally with exempt educational services.

Wisconsin does not provide an exemption for the sale of educational products. Sales of books, video tapes, CDs, and DVDs are taxable in Wisconsin, regardless of whether the content is educational.

When a person sells pre-recorded webinars, whether downloaded or viewable online, the person is selling a taxable digital good. However, the sale of a digital good (such as a pre-recorded webinar) may not be taxable if the purchaser is receiving an educational service, and the pre-recorded webinar is transferred to the purchaser incidentally to the educational service. A pre-recorded webinar is transferred to the purchaser incidentally to the educational service if one of the following occurs:

• The participant is evaluated by an instructor. “Evaluated by an instructor” does not include being graded by, scored by, or evaluated by a computer program or an interactive, automated method.
• The participants are connected to other participants and presenters via internet or other networks, allowing the participants to provide, receive, and discuss information together by live interaction during the presentation.
• The pre-recorded webinar is certified by a branch of government for the participant to receive continuing education credits to obtain or remain in good standing with their government-issued license.

(Sales Tax Treatment of Educational Products, Goods, and Services, Wisconsin Department of Revenue website, November 16, 2020)